Question

HiTech Products manufactures three types of remote control devices Economy. Standard and Deluxe The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below 

Activity	Cost	Cost Driver
Material handling	$ 225,000	Number of parts
Material insertion	2,475,000	Number of parts
Automated machinery	840,000	Machine hours
Finishing	170,000	Direct labor hours
Packaging	170,000	Orders shipped
Total	$3,880,000

The following information pertains to the three product lines for next year: 

Units to be produced	Economy	Standard	Deluxe
Orders to be shipped	10,000	5,000	2,000
Number of parte per unit	1,000	500	200
Machine hours per unit	1	3	5
Labor hours per unit	2	2	2

17. Under an activity-based costing system, what is the per-unit cost of Economy? 

A $164. B. $141 C. $225. D. $228. E. An amount other than those listed above. 

18. Assume that HiTech is using a volume-based costing system, and the preceding manufacturing costs are applied to all products based on direct labor hours. How much of the preceding cost would be assigned to Deluxe?

 A $456,471 B $646.471 $961,176. D $1,141,176 E An amount other than those listed above.

Answer 1